Predicting the decline in Apple’s brand equity

Back in 2011 I mocked the brand equity industry for playing catch-up in valuing Apple.  Everywhere I look the evidence is that these brand equity valuations rise long after the stock price rises, and decline long after it declines.

It’s the same story for predictions of sales success.

In short they predict nothing.  They just tell us things we already knew.

By 2012 Apple was entrenched as the most valuable brand in the world, not surprising given that much earlier it had achieved the highest market capitalisation.  Brandz gushed that Apple’s brand equity had risen a further 19% in their estimation.

Since then I’ve not heard any reports from the brand equity industry predicting a decline in Apple’s value.  Meanwhile its stock price has almost halved since September 2012 (see graph below).

Here’s my prediction – soon (ie late 2013) the brand equity firms will announce a  decline in Apple’s brand equity.  Even though Apple’s sale revenue has continued to climb (see chart 2 below and this link).  Even in traditional markets like the US it has increased its market share in phones and computers.

So if the brand equity firms do downgrade Apple’s brand equity it will have to be based on its stock price.  What value do these equity values give then, when anyone can look up the stock price of any public company and be many months ahead of the brand equity valuation?

Chart 1 – APPL Stock price

Chart 2 – APPL Sales revenues

APPL

Applesales$

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3 thoughts on “Predicting the decline in Apple’s brand equity

  1. Hi Byron,

    I agree on the brand equity evaluation piece, but surely a similar observation could be made of stock market evaluation, yes analysts pore over the numbers revealed in quarterly market release data, but stock prices are also defined by sentiment, the views of analysts and buyers. Goodwill, intangible asset value etc. are all priced into the stock-market price which therefore can be as ethereal as brand value. The current developing asset bubble is built upon sentiment not the actual underlying fundamentals.

    • The drivers of stock market prices are complex, impossible to predict.

      But they are real, in the sense they simply report what the market is actually paying.

      In comparison, and given we have these market prices, what’s the point of brand equity scores?

  2. Hi Byron,

    I’m looking for an consultancy to help the company I work for to develop a whole branding strategy. One of them claims to use a methodology that is mostly based on stock prices. At the beginning it definitely caught my attention but after some time and based on their latest ranking, I found that their way to see things had something quite weird. When you pointed out this theme in you article it became kinda clear. Is it something very similar to how people evaluate their ROI based only on their latest campaigns and not considering everything they’he already developed? Cheers.

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